The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

Second Finance Collapse Sparks Angry Questions By KEN SMITH Canadian Press Business Editor TORONTO (CP)--The death of Prudential Finance Corp, Lid. has given the financial community its second crude jel! in 18 months, Following the June, 1065, col lapse of Atlantic Acceptance company could weather Its dif- ficulties with the support of noteholders,"' he said. 'At this time there had been told they had no guarantee of getting their money back, and were warned that hopes of a re turn could lem mg ure com: pany's success in gelling more! 44 default in meeting commit: notes to got funds, ments and there was no suspl- Mr, Biddell said that payingicion of any possible infraction the interest on these notes waslof the Securities Act or the sag pena "| loss ov Nt ie Criminal Code, rudential Finance--$6, in five years, lon bad the ie Mr. Wishart said that by last a officers of the Crown, the spring it was known the com:/commission and the advisers to pany might have trouble meet+|the provincial secretary and no ing its long-term commitments. evidence was found that would "Mr, Brien acknowledged the}lawfully warrant the action 0! difficulties but in his opinion the the department at that time." sought approval for a prospec:|pany after all secured eredit- us under these terms, Mr, Wis: Ore, Hart HaiG, it Wan Ordered io pu; ~ ae z this warning in the front: notes offered by this pcan 'The shortterm promissory|may be honored in whole or in 1otes offered by this prospectus|part by proceeds derived from are unsecured and the holders|the sale of additional securi- thereof rank with the other un-|ties," secured creditors of the com:! In other words, investors were On Nov. 1, however, Pruden- tial Finance delayed the pay: ment of interest to some credit ors and Metropolitan Trust Co, Ltd.--acting as trustee for the note and debenture holders~ called in Clarkson, Two weeks later, {he company was put into interim receiver: ship and the facts started tum- bling out. ¢ Mr.. Wishart's state- Des, i 7 men that no evidence was nd to justify legal action, creditors poure government for not telling them what the situation was, meeting: a tnker tion' time." blame on the the LOST HIS LIFE SAVINGS Rev, Allen Ferry, a retired). --------- United Chureh minister who re: ported losing his life savings in the collapse, told the creditors' "The government doesn't give 8 cuss for any of us-- all they want Is our vote at elec- Other attacks -- many more sivongiy worueawere maae un the government for not making some statement eariier, No one suggested, 'however, government shouid checked while the company was ea a eae ia IO OT Te he iil ol filha ittitiitiaditt th atl aiid atina THE OSHAWA TIMES, Monday, Decomber 19; 1966 43 Meanwhile, demands for a royal commission continue to come from hag and oppo- sition parties in both Toronto and Ottawa, If one should be named, it would be the third in Ontario in page eae Seg with ine After the boom-bust in the price of shares of Windtall Oils and Mines Ltd, in 1964, a commission held extensive hear ings in 1965, paying its high interest rate regularly, and one speaker who said creditors should aceept it as a bad investment decision in- stead of blaming the govern: ment was told to shut up. One collapse-that of North American General Insurance already has been blamed on theft of securities, Finance Minister Sharp said in the House of Commons that the disappearance of more than a worth of securities was heft, have Corp, Lid,, it has sparked re- newed outbursts of angry ques tions about why it happened, with fervent demands that somehow---public and private of: ficlals make sure it doesn't oc cur again, Although Clarkson Co, Lid, named trustee after Prudential Finance was put into bank: ruptey Dec, 5, says it will take many more weeks to sort out all the details, losses already 'ave been set at $19,000,000 or $20,- 000,000 with recoverable assole around $6,000,000, When the company first was reported in financial trouble a month ago, losses were esti: mated at only $3,500,000, Since then, auditors' investigations oe uncovered fresh difficul- tles, | While Prudential Finance's losses represent only one-quar> ter of those absorbed by At- lantic creditors, its collapse has brought much sharper and more bitter public criticiam for at least two reasons, ATLANTIC STILL FRESH First, its downfall occurred while Atlantic still is fresh in pee? minds, with new reve: tions coming daily from the oneman royal commission in- vestigating its tangled affairs. Second, most of the creditors caught in Prudential Finance are small. investors compared with the large corporations which got stung in Atlantic, For many of Prudential Fi- nance's creditors, the collapse and the probable return of no more than 15 cents on the dol- lar means an end to a life's savings. The emotionalism engendered by the collapse reached a cli- max last week when 800 of the 8,500 Canadian creditors held their first meetinga session that saw governments, laws and business cursed for letting it happen, So violently did the losers feel that many applauded loudly when one speaker called for a lynching. Prudential Finance's troubles have had other repercussions too. One man has been arrested-- Sl-year-old Joseph Benoit Brien, the company's poeiieet. He faces six charges, including theft and forgery. \ Ph TE COMPETITION BRAND NEW MOFFAT 0" RANGE whew' FULLY AUTOMATIC CLOCK CONTROLLED @ Infinite:heat awitehes © Fluorescent Hehting @ Automatic high-epeed oven t © Automatic cloek control with Minute Minder FOLD Twe peorere Saeed tnecheare 'of Montreal and Wentworth Insurance of Toronto--are being wound up, the first time in about 40 years this has happened in Canada, It still is not clear what will happen to policyholders with claims against these companies, although normally they would have to stand the losses them- selves, Tt has been reported, however, that other companies may pick up the pieces to protect the in- dustry's image, The bill has been ---- at $600,000 to $1,000, Solid, Dell + established com- panies have had their troubles, because of a similarity of names Prudential Life Insurance Co. has twice issued statements ex plaining it has no connection with Prudential Finance. North American Life Assur: ance Co, and North American Life and Casualty Co, have is: sued similar statements -- but the confusion still remains, of- ficials say More confusion on names exists on a fringe aspect of the situation TSE GIVES EARLY CLUE Brien is secretary-treasurer of O'Brien Gold Mines Ltd., taken over @ year ago mm @ sioeK rt a from the O'Brien family of Ot- tawa, One of the early indica tions that Prudential Finance was in trouble. came when O'Brien Gold Mines was sus: pended last month by the Tor onto Steck Exchange for mak ing a loan to Prudential Finaace without reporting it to the Ex-/ change as required by listing| regulations From statements by Attorney General Arthur Wishart of On- tario and J. L. Biddell, presi- dent of Clarkson Co., has come some indication of how Pruden- tia! Finance's troubles build up Mr. Biddell told the creditors meeting that in the five years since Brien took the compony aver, income has deen less than $3,000,000---while losses, includ: ing subsidiary operations, ioial $17,000,000 with move likely to come Prudential - Finance's books showed an aperating loss of $900,000 for the five years, but Clarkson's auditers found about $11,000,000 Mr. Wishart said in a state ment at the time of Brien's ar rest Dee, 2 that after he took the company over in 1982 it started on a program of cap ital expansion by selling shor term notes or certificates bear ing interest at the rate of eight per cent or more--"an extrem ely attractive rate at that time," In 1963 Ontario, distributed by this method of soliciting funds fram the public, passed legislation requiring these so called "l@-percenters" to file a prospectus with the Ontario Se eurihies COMMISSION cOVernag the sale of short-term notes of less than $50,000. WARNING TO INVESTORS | win Ll CONTR r il SY_ LIFT.¢ DOO POR EASY: CLEAN! or yh SLIDE-OUT PORCE- LAIN SIDE WALLS our OF OVEN olan (OPTION. PLUG-OUT ELEMENTS! Just et phe: eet mim wader weter or dip are werm weter fer cnn, portent Oprienat, 1,001 Nach fn every elernees her or cold apate, Plagseut atemente aptions ot entee, £93" TELEVISION Rs j | BL D a THE GUARANTEES PRICE IS RIGHT : TRADES WANTED WITH MOST MAJOR . APPLIANCES fy' COMPACT SENN LISTON Pe 4 --. x 'sane mer alll WILKINSON th 4 Sees T PHILCO COOL CHASSIS: Wabi ett aid Re i's Rutomat om Co Black level " Con: Copper nareved rei ae we § dy aa Guard stan * Neve Aute- lable Sihcon Recti SWIVEL CONSOLE » , MULTIPLE SPEAKERS Alomned Pre * Tube be MANDY CUTTING EDGE 20° Wide 27" Wide Votes 1,48 ifit - ett oA = ms MULT! PISTOL 09 «Secret maciage main V2WHEELS®27° LONG § STRONG DURABLE CONSTRUC: TION @ HINGED TAILGATE @ TI. PING TRAILER © THE IOFAL GIFT FOR THE LITTLE BOY IN YOUR FAMILY 3 : 99 Votee $7.08 5,11 Open 'til 9:3) p.m. Every Night SATURDAY 'til 6 P.M. KING ST. E. al Townline 728-4658 PLUS 10% a SEE-A-SHOW STEREO VIEWER SET LOOKS SO REAL YOU FEEL YOU ARE IN TRE SHOW CONTAINS: @ 105 Stereo Scenes e]S Exciting Shows, . See oh these ful © @rtoon shows oF your Javounter nT Omenven Petures THE GOOD LUCK GOBLIN BROADLOOM x HURRY! WHILE THEY LAST at a || ae YOUR CHOICE a5AD CES Binz FULLY 3 AUTOMATIC Electric oe LE 5 59 Automatic Shut- off, Complete with Cord, Full Guaran- 100 comp. VALUE $8.95 "POP-UP = TOASTERS FULLY ba $ & 88 = =$ Electric Automatic our, vatur Poe-Up Full Guaren SSE come, varut $3.99 FAMOUS WEARIVER veouHIND or veoking = C evt colores. ELECTRIC Temas. KNIVES ae Complete with two byes Diades, Se Hoty gon nol "come, ae oat Leet vaiue Year guarantor, cuemeneniiiinsiaeeinie Tt) 10" vive = ne without fet end FAMUUS MAKE @ "FAMOUS MAKE @ ELECTRIC. SANDWICH GRILL $ BEAUTIFUL al CHROME ANISH BU: ARAN reed Rte cri "Shy eh ee a = LETT ee eww Er "TUSSY: 2 ge 5 cm i! MARIIE.: THE FAMOUS CANADIAN MADE FASHION DOLL ') MLFOR yp. WY? owe conn ys : COLOGNE 15s } aaa sO rae ta aT | SAVE H SOMPAct 9908 BEAUTY TOUCH Up To 40% SX Mince" "aes On Furniture 18) @ BEDROOM suites ™ @ CHESTERFIELDS @ DINETTE SUITES @ DAVENPORTS @ BEDDING $3 DOWN DELIVERS NO PAYMENTS TIL MARCH WITH NO ADDITIONAL FINANCE CHARGES 4 ee Panes so i ee ee ee AOA a it: Saha thant aia) =